VirginiaHB15132026 Regular SessionHouseWALLET

Qualified self-settled spendthrift trusts; disbursements, powers of trustee.

Sponsored By: James A. "Jay" Leftwich (Republican)

Became Law

Summary

Qualified self-settled spendthrift trusts; disbursements; powers of trustee. Provides that a trustee may reimburse a settlor of a trust from the income or principal of such trust for various forms of tax liability in certain circumstances and in accordance with the Internal Revenue Code except as the terms of the trust provide otherwise. The bill also provides that a trustee shall not have the power to make such a reimbursement under certain conditions unless the terms of the trust expressly provide otherwise. The bill also removes redundant language governing the order in which a new qualified trustee may be appointed in the case of a vacancy.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 0 costs, 2 mixed.

Virginians can use asset‑protection trusts

Virginia law allows a qualified self‑settled spendthrift trust. The trust must be irrevocable, follow Virginia law, have an independent qualified trustee, have a spendthrift clause, include another beneficiary, and the settlor cannot block payouts. The settlor can hold a “qualified interest,” meaning payouts happen only if an independent trustee decides. That qualified interest is shielded from a key creditor‑claim rule, and keeping it or gifting assets to the trust is not automatically fraud. Creditors can sue to undo a transfer only within five years of each transfer, and moving the trust’s administration to Virginia starts a new transfer date. If you make several transfers, payouts are treated as coming from the newest one, and you cannot sue the trustee or advisers over the transfer. Keeping certain listed powers does not make the trust revocable. If a beneficiary’s right to withdraw their whole interest lapses, that person is treated as the settlor for that amount.

How trusts pay expenses and taxes

Trustees must charge certain listed costs to principal, like sales costs, debt principal, court costs about principal, some insurance, and estate taxes. If income from an asset is paid to a creditor and reduces the debt principal, the trustee must move the same amount from principal to income. Unless the trust says otherwise, a trustee may reimburse the settlor’s state or federal income taxes tied to trust income, and can pay the settlor or the tax agency. A trustee may not reimburse if the trustee is related or subordinate to the settlor in a nonrevocable trust, or if reimbursement would reduce or block federal tax benefits that apply to the trust.

Rules for choosing and replacing trustees

A qualified trustee must be a Virginia resident or a company allowed to do trust business in Virginia and must handle key work in Virginia. An independent qualified trustee cannot be directed by the settlor, close family, certain entities, or other disqualified people. If a trustee seat is empty, the law sets the order to fill it: a named eligible person, a unanimous choice by qualified beneficiaries, or the court. The same replacement order applies to independent qualified trustees.

Sponsors & Cosponsors

Sponsor

  • James A. "Jay" Leftwich

    Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 183 • No: 0

Senate vote 3/9/2026

Constitutional reading dispensed Block Vote (on 2nd reading)

Yes: 40 • No: 0

Senate vote 3/9/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote 3/5/2026

Reported from Courts of Justice

Yes: 14 • No: 0

House vote 2/17/2026

Read third time and passed House Block Vote

Yes: 97 • No: 0

House vote 2/11/2026

Reported from Courts of Justice

Yes: 22 • No: 0

House vote 2/9/2026

Subcommittee recommends reporting

Yes: 10 • No: 0

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0476)

    4/8/2026Governor
  2. Approved by Governor-Chapter 476 (effective 7/1/2026)

    4/8/2026Governor
  3. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/31/2026Governor
  4. Enrolled Bill communicated to Governor on March 31, 2026

    3/31/2026House
  5. Signed by Speaker

    3/31/2026House
  6. Bill text as passed House and Senate (HB1513ER)

    3/30/2026House
  7. Enrolled

    3/30/2026House
  8. Signed by President

    3/30/2026Senate
  9. Passed Senate Block Vote (40-Y 0-N 0-A)

    3/10/2026Senate
  10. Read third time

    3/10/2026Senate
  11. Passed by for the day Block Vote (Voice Vote)

    3/9/2026Senate
  12. Constitutional reading dispensed Block Vote (on 2nd reading) (40-Y 0-N 0-A)

    3/9/2026Senate
  13. Rules suspended

    3/9/2026Senate
  14. Reported from Courts of Justice (14-Y 0-N)

    3/5/2026Senate
  15. Referred to Committee for Courts of Justice

    2/18/2026Senate
  16. Constitutional reading dispensed (on 1st reading)

    2/18/2026Senate
  17. Read third time and passed House Block Vote (97-Y 0-N 0-A)

    2/17/2026House
  18. Read second time and engrossed

    2/16/2026House
  19. Read first time

    2/13/2026House
  20. Reported from Courts of Justice (22-Y 0-N)

    2/11/2026House
  21. Subcommittee recommends reporting (10-Y 0-N)

    2/9/2026House
  22. Assigned HCJ sub: Civil

    2/5/2026House
  23. Referred to Committee for Courts of Justice

    1/23/2026House
  24. Presented and ordered printed 26103490D

    1/23/2026House

Bill Text

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